Persistence of informal social networks in East Asia: Evidence from South Korea

Horak, S., & Klein, A. (2016). Persistence of informal social networks in East Asia: Evidence from South Korea. Asia Pacific Journal of Management, 33(3), 673-694. DOI: 10.1007/s10490-015-9416-1

This study investigates the nature and influence of informal social networks in South Korea (Yongo) by analyzing trust levels and network cohesion. Predominantly based on studies on Chinese Guanxi, it is widely believed that the further a nation develops stable formal institutions the more the influence of informal relations decreases. Given South Korea’s position as a strong economic powerhouse with established rule of law and democratic institutions, the influence of Yongo should play an insignificant role today. We find significant evidence that network cohesion of Yongo is still strong in South Korea, despite its economic rise. Contrary to expectation, we observe a higher-than-expected degree of general trust and a continuous commitment to Yongo ties at the same time. These findings document recent changes in South Korea such as the beginning of its multicultural opening, whereas informal Yongo ties, characterized by emotional interpersonal bonds, still remain pronounced. Foremost, we recommend current beliefs about the correlation of institutional development and decreasing informal transactions to be reconsidered. We propose further studies to better understand how informal social networks evolve over time.

Yongo, Korea, Informal institutions, Social networks, Trust, Guanxi

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